9 Formulas You Have To Know To Pass Wall Street's Hardest Exam

First off, if you’re reading this, good luck. You’re going to need it on Saturday.

The Chartered Financial Analyst (CFA) exams are this weekend. They are commonly known as the most hellish exams taken by Wall Street professionals. Fewer than 20 per cent of candidates pass all three tests in the first attempt at each.

What makes the CFA so difficult is the sheer volume of information you have to study and use. There are tons of formulas and ideas all over the exam — we couldn’t possibly cover it all here.

So we’ll give you what you absolutely have to know — 9 formulas candidates that will most assuredly show up on all three levels of the CFA exam.

Duration With Convexity Adjustment: Duration is the average time until all cash flows from a bond are delivered. The convexity adjustment helps determine the change in price that is not explained by duration.

DuPont Identity Of Return On Equity (ROE): This breaks ROE into profit margin, total asset turnover, and financial leverage. It explains the operating efficiency, asset-use efficiency, and overall financial leverage of a company.

BONUS: The Herfindahl Index measures market concentration, and is used by regulators to determine whether a company has a monopoly on a market.

The CFA program isn't the only way to learn about finance.

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